A lot of times when you receive an email from a CPA or an Attorney you see a disclaimer at the bottom of that email that states something to the effect that this is not a covered opinion and cannot be used to avoid tax penalties or recommend a particular tax strategy, etc.
The days of that disclaimer at the end of emails may be over. The IRS implemented revised regulations governing practicing before the IRS effective June 12, 2014. As part of these revised regulations, there were changes made that may make that annoying but required disclaimer at the end of emails no longer necessary.
Standards for written tax advice are necessary due to the issuance and marketing of written tax opinions that promote abusive transactions. The new rules provide practical, flexible rules that are well suited to the issuance of quality written tax advice, provided in an ethical manner, in today’s practice environment.
The new regulations require the practitioner base all written tax advice on reasonable factual and legal assumptions, exercise reasonable reliance, and consider all relevant facts that the practitioner knows or reasonably should know. A practitioner must also use reasonable efforts to identify and ascertain the facts relevant to written advice on a Federal tax matter.
Persons authorized to practice before the IRS have long been required to comply with certain standards of conduct, and those who provide written tax advice currently must comply with specific rules for this advice. Because the final regulations replace rigid rules for written tax advice with more flexible rules and eliminate the necessity to provide disclaimers in certain written tax advice, the rules will reduce the burden imposed on small entities that issue written tax advice.
Many individuals used a Circular 230 disclaimer at the conclusion of every email to remove the communication from the covered opinion rules in the former regulations. Because the Circular 230 disclaimer was in a normal email signature, the disclaimer was typically included in email communications that did not contain any tax advice.
The new regulations, and in particular Section 10.37, does not include the disclosure provisions included under the old regulations. Former Section 10.35, that contained the disclosure provisions, was eliminated from the revised regulations. Because amended 10.37 does not include the disclosure provisions, the Treasury Department and the IRS expect that these amendments will eliminate the use of a Circular 230 disclaimer in email and other writings.
Today, I ceremoniously and gladly deleted the Circular 230 disclosure from my email signature.
The revised Circular 230 is a 48 page document, so by no means have I tried to summarize the content of the revised regulations regarding providing written tax advice. But I, as well as many other tax practitioners, are finally glad the email disclaimer is now officially no longer required.
A lot of the content for this article was taken from the Revisions to Circular 230 published on the IRS website.
Corporate Office